Vauld stops withdrawals, trading, and deposits because of financial problems
Vauld, a crypto lending and exchange startup based in Singapore, has stopped withdrawals, trading, and deposits on its platform as it faces "financial challenges," the company said Monday.
The three-year-old startup has raised about $27 million from investors like Peter Thiel's Valar Ventures, Coinbase Ventures, and Pantera Capital. It says it is having trouble making money because of the market downturn, which has caused customers to withdraw about $198 million since June 12.
Darshan Bathija, the founder and CEO of Vauld, said that the company is looking into ways to restructure. He said that the company has asked Kroll for financial advice and Cyril Amarchand Mangaldas and Rajesh & Tann in India and Singapore for legal advice.
Also Read: Inside A Corporate Culture War Stoked By A Crypto C.E.O.
The new company plans to ask the Singapore courts for a stop.
"We are confident that with the help of our financial and legal advisors, we will be able to find a solution that will best protect the interests of Vauld’s customers and stakeholders," he wrote in a blog post, adding that the startup will make "specific arrangements" for certain customers who need to meet their margin calls. no one knows how many people Vauld serves.
On its website, Vauld says that users can borrow up to 66.67 percent of the value of their tokens and that their loans are approved "instantly." Like many tech stocks, the value of many crypto tokens has dropped by more than 70% in the past six months.
"We want customers of the Vauld platform to understand that we won't be able to handle any new or additional requests or instructions in this area.
"Specific arrangements will be made for customer deposits that may be needed for some customers to meet margin calls for collateralized loans," Bathija wrote today.
Two weeks ago, Vauld told its employees that they would be losing 30% of their jobs.
This move is unexpected.
On June 16, Bathija told Vauld customers that the platform had no ties to Celsius, another lending startup that is having more and more money problems, or Three Arrows Capital, one of the most well-known crypto hedge funds that filed for Chapter 15 bankruptcy over the weekend.
"We remain liquid despite market conditions.
"Over the past few days, all withdrawals were processed as usual, and this will continue to be the case in the future," Bathija wrote earlier.
In the past few weeks, several crypto veterans, like Changpeng Zhao, the founder and CEO of Binance, have warned that many more Defi platforms are about to fail.
Zhao said in a recent podcast that Binance has been in touch with more than 50 companies in the past few weeks to talk about funding or bailing out some businesses.
"Most of the time, the same deals you hear about in the news are the ones that come to us first," he said.
"We have more cash on hand than any other exchange.
We try to save as much of the industry as we can, but not every project is worth saving."
The U.S. branch of FTX signed a deal with troubled cryptocurrency lender BlockFi on Friday. The deal gives the Cryptocurrency Exchange the option to buy the startup for up to $240 million, depending on how well the startup does.
BlockFi was one of the companies where Three Arrows Capital got rid of at least some of its positions. In March 2021, the company said that it had raised $3 billion in a financing round.
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